Bitcoin || Guide 01 || What is bitcoin, History of Bitcoin, how does it Work.
Before going to the complex concepts, it's always helpful to understand basic concepts. So, in this article, I'm going to explain what actually bitcoin is, what's the history of bitcoin and how does it work?
So, let's start...
What is bitcoin?
Bitcoin is a Decentralized digital currency, with no physical form. As bitcoin is Decentralized so there is no central bank or single authority it's a peer-to-peer network, which means one can send or receive money without the involvement of a third party. The transactions done in the bitcoin network are verified by network nodes through the process of Cryptography and all transactions are recorded in a public distributed ledger which is called a blockchain. There is no any government institute or any other financial institution that controls it. The owners who own bitcoins are anonymous, which means there is no identity that can be used to find the owner, in the bitcoin network, there is no name of the person, any Social Security number in short there is no identification.
As it's a peer-to-peer network so it is considered the most secure and efficient system. But nothing in the world is 100% efficient, there are many security issues that bitcoin is facing which I'll discuss in my next post.
History of Bitcoin:
The domain of bitcoin was first registered in 2008, on 18 August. ln 2008 on 31 October a paper authored by Satoshi Nakamoto was found with the title of "Bitcoin: A peer-to-peer Electronic Cash System" on the Cryptography mailing list.
Satoshi Nakamoto is still unknown, maybe an individual or group the real identity is hidden.
In 2009 bitcoin became available to the public.
The first transaction of selling bitcoin was first made in 2010 for the purchase of two pizzas, and at that time transactions of 10000 bitcoins were made. From this transaction, the real journey of the bitcoins world was started. The last hearing from Nakamoto was in 2011 when Nakamoto shared the source code and domains with the bitcoin community.
How does bitcoin work:
Bitcoin is a digital phenomenon, which is basically a set of different processes and protocols. Bitcoin is built on the technology of blockchain. Blockchain is a system of linked blocks which are also called nodes, and have each and every information related to each transaction. And the transaction made in the blockchain is verified through all nodes. As I mentioned early, the whole system is Decentralized and has no central authority, anyone who has Link can contribute to it. Anyone can contribute to it, sounds risky but it's the actual fact that makes it the most secure system and trustworthy. In order to make the transaction, it must be verified by a majority of the blocks added in the blockchain, if any block finds something wrong, they can reject the request. With the verification of multiple blocks, transactions become more secure and authentic. In the Bitcoin network, there are unique codes that are used to recognize user's transactions and wallets, these codes are random, long, and difficult that make it very difficult for anyone to produce fake codes.
Bitcoin Mining is the process of adding new transactions to the bitcoin blockchain. It is a very difficult and complex job. People mostly use the process called "Proof of work" to mine in blockchain, which is very difficult and people have to solve complex mathematical problems and puzzles that requires a lot of time and energy.
This is the short details; a complete guide of every section will be in the next posts.
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